Q620 Chairman: I do not know; we
are still exploring this, but would that mean that you could have
a wider but simpler definition which would pin itself to disloyalty,
not just any old breach of duty but breach of a relationship which
amounted to corruption? Or would that be going much too wide?

Mr Justice Silber: I think in
that case you are reaching into an area of having to work out
what obligation is owed between the recipient and the donor and
that immediately raises quite difficult points as to what their
duties are going to be. In the situation that we were considering
we were dealing with cases where there was a pre-existing duty
and a pre-existing relationship.

Q621 Baroness Whitaker: If I can
just explore a little bit your focus on disloyalty as the thing
which has to be prohibited, is it not the case that the person
who might really be most cheated of all is the end user, either
in Lord Campbell-Savours' tender where the end user is, say, the
inhabitant of the resulting building, or somebody else who is
cheated of what they should expect from a transaction, because
two people have privately connived to make money out of it and
to rig it? In your fundamental concept of disloyalty between the
agent and the principal how can one cover the cheating of the
end user?

Mr Justice Silber: In most of
the corruption cases, one would actually be dealing with the cheating
of the end user because the cases that we came across that were
being dealt with were cases usually of corruption of local authority
officials to divert contracts to a particular company that would
obviously be tendering at a less beneficial price, so to that
extent almost invariably they would be. The way we looked at this
was by focusing on the disloyalty to the relationship.

Q622 Baroness Whitaker: So you are
saying that the harm to the end user is incidentally covered in
your concept of disloyalty?

Mr Justice Silber: Yes.

Q623 Baroness Whitaker: But it is
not the primary target?

Mr Justice Silber: No. It would
be a serious aggravating factor in that case and there can be
a number of cases of corruption where in fact the end user is
not prejudiced at all, where money is paid by a contractor to
an individual to get a contract which they would have got in any
event, so the only loser in that case is the paying party. I would
suggest that it is an aggravating factor if the end user is penalised
but it should not be the litmus test for liability.

Q625 Dr Turner: If there were a situation,
which I am quite sure does happen, where you have got a systematic
cartel operating by contractors who are bidding for public service
contracts and therefore the prices of the tender are artificially
inflated, the public is, if you like, the end customer and the
public purse is being cheated. Is that or is that not corruption?

Mr Justice Silber: We are getting
very close to the difference between corruption and misuse of
public office. I presume it is public officials you are talking
about.

Dr Turner: Yes, but let us assume for
the moment that the public officials are blissfully unaware of
this. They are just getting the tender prices in but they are
getting them not knowing that there is a certain amount of rigging
going on between contractors.

Q626 Lord Carlisle of Bucklow: Is
the emphasis that you put on principal and agent partly because
one has always looked upon corruption rather in the public sector
where the person being corrupted is invariably an agent to the
public rather than the private sector and that this Bill is now
bringing the private sector and the public sector together and
has still retained principal and agent centrally to the Bill?

Mr Justice Silber: I think it
really goes back to the point that the purpose of these sorts
of corruption was the conferring of advantages in breach of somebody's
obligation, I would say in a layman's sense for many a general
fiduciary obligation that is owed, and that corruption was a form
of interfering with that relationship. The point that has been
put to me about the tenders and so forth raises the question about
how you construe what the obligation is which is being interfered
with and once you move away from interfering with an obligation
of a fiduciary nature it does get very difficult to know exactly
where that stops.

Q627 Lord Carlisle of Bucklow: The
language of principal and agent does not fit so easily in the
private sector, does it?

Mr Justice Silber: What could
be done would be to make it clearer as to what the agent is. I
cannot quite recollect it but, certainly in the Law Commission
proposal there was a meaning of what is meant by "agent"
and "principal".

Q628 Lord Carlisle of Bucklow: Clause
11.

Mr Justice Silber: And I think
you have got it in Clause 11 as well. It is, I think, slightly
wider in the Law Commission proposal in Clause 9. I am concerned
as to how one would construe or how one would formulate a criminal
offence where the arrangement was not a bid for contracts because
you would have to work out some obligation and be able to specify
what the extent and nature of it is. That might to be a practical
difficulty.

Q629 Chairman: I would like to move
forward a little bit. We have looked at the principal and agent
and you have explained your position on that. Sections 1 and 2
require that there shall be an advantage before there is an offence,
and Section 3 does not refer to advantage. The person commits
an offence if he performs his function as an agent corruptly.
Where does advantage fit into that, or does it not? Do you have
to show that there is an advantage there? You get it in Clause
10.

Mr Justice Silber: Clause 10 will
tell you how it is. There are three corruption offences of which
the third one is Clause 3 linked to Clause 10.

Q630 Chairman: So you bring advantage
into clause 3 through Clause 10?

Mr Justice Silber: Yes.

Q631 Mr Stinchcombe: What happens
then if a local government officer simply refuses to exercise
his powers of discretion properly, just for reasons that he is
a maverick and disruptive?

Mr Justice Silber: In that case
that will be moving on to misuse of public office on his part.

Q632 Mr Stinchcombe: And that is
not yet covered by this Bill?

Mr Justice Silber: No, because
that is a separate aspect. Lord Nolan's Committee looked into
this. I took it further when I was at the Law Commission but I
think it was then put on ice waiting for the decision of Dame
Shirley Porter's case. It seemed desirable first to determine
exactly what the existing law was before it was decided how to
take that further. That is certainly an ancillary subject, the
misuse of public office.

Q633 Chairman: Is the reference here
to an advantage in effect in all three sections because conceptually
the Law Commission did not think there could be corruption unless
an advantage was conferred or obtained, or is it that you wanted
to limit the offence in this Bill to situations where an advantage
was conferred or received? Can you have corruption without an
advantage?

Mr Justice Silber: Bearing in
mind that advantage is widely stated (and, as you will see, for
example, in 4(1)(a), which is omitting to do something, it can
be a failure to do something), there has to be some form of benefit
and I think the word "advantage" was used as being the
most neutral word that the draftsman could think of but significantly
it does consist of an omission to sue.

Q634 Chairman: So you are saying
that there could not be corruption in the absence of an advantage,
construed, as you rightly say, in accordance with Clause 4?

Mr Justice Silber: Yes, because
that is the thrust of what is being done to interfere with the
relationship.

Q635 Chairman: And that is a necessary
part of the concept of corruption?

Mr Justice Silber: Yes.

Q636 Chairman: It is not simply something
you have done here? If you had said that it would be possible
conceptually to have corruption without an advantage, my question
obviously is going to be, why did you exclude that here? The answer
you say is that it is not part of the nature of corruption.

Mr Justice Silber: Not in the
nature of it tono, that is the nature of it. I think it
has to be limited in that way.

Q637 Chairman: Was the previous law
limited in that way?

Mr Justice Silber: I think it
would have been limited in that way in the previous legislation.
I do not think we had any suggestion that we should widen that
at all.

Q638 Baroness Whitaker: Speaking
about widening and looking a little bit at the international dimension
of this Bill, because of course it is a UK law but the Government
hopes to implement the OECD conventions through it and the OECD
partners are the governments which have big contractors and want
there to be a level playing field, I do not think this international
dimension was uppermost in your memorandum. Obviously, you were
concerned with UK law but other jurisdictions have got a wide
range of offences and one of them is trading in influence and
we were looking as to whether that ought to be in. We asked Lord
Falconer last week if he thought that should be covered and he
said that it was already covered in Clauses 1 to 3, so we wondered
whether you would agree that 1 to 3 do cover it.

Mr Justice Silber: I was involved
with the OECD's approach up to about 1997. I am not familiar with
what they have done since.

Q639 Baroness Whitaker: They have
not got trading in influence in their conventions. It is just
that some countries have used it when they implement the conventions.

Mr Justice Silber: You get assistance
from Clause 13 because that deals with corruption committed outside
the United Kingdom.